Sugar cosmetic's journey to ₹500 Cr revenue 💄
Humble beginnings from 100 lipsticks/year to 1000 lipsticks/day 🤯
Welcome to the 58th edition of the GrowthX Newsletter. Every Tuesday & Thursday I write a piece on startups & business growth. Today’s piece is going to 94,400+ operators & leaders from startups like Google, Stripe, Swiggy, Razorpay, CRED & more
Stuff you should know: Sugar is currently at ₹500 Cr revenue and is on track to get to ₹2,000 Cr revenue by end of this year. The brand was fundamentally into a different orbit when it changed the way they market themselves.
Quick back story 🗓
Vineeta Singh along with her husband Kaushik started Fab Bag - an online monthly subscription program for the young Indians to explore global brands at just INR 600 a month. At its peak, Fab had a little over 2,000 beauty profiles of women. The items in the bag were curated by experts as per the latest trends of the month.
Fab bag grew mostly through fantastic peer-review and influencer marketing, a strategy that continued for Sugar.
Primarily because cosmetic is an industry that breeds on feedback. People want to buy products, but they’re never really sure of what. Letting experts create a bag for you exposes you to safe, reliable goods. This reception for Sugar products inside the FabBag birthed a sweet transition from the subscription model to a completely new cosmetic company.
First movers advantage 🏃♀️
Back in 2015, Sugar launched something called a black matte eyeliner and black kohl pencil, & both of them went viral, especially in UK & US. So much so, that it went out of stock on all distribution platforms.
This was when no big players, including Lakme, & Maybelline were catering in the matte domain. This is how they got their first shot with scale of customers.
Thumb stopping packaging 📦
Thumb stopping simply means content that’s designed to make your thumb stop from scrolling - it could be text, image, illustrations etc.
In sugar’s case, it was their packaging.When other brands went minimal, sugar chose bold illustrations that created a dent in the mind memory of their users. Contrarian works indeed. No wonder why every premium brand is going after the NeoPOP design now ;)
Direct to Consumer (D2C) - a choice 🤘
According to Vineeta, Sugar’s best decision was going D2C and not relying on a market place like Amazon. In her words, no one gives the new kid on the block the attention they deserve, it’s something you grab.
With her own platform, Vineeta wanted to control the Sugar’s narrative & get closer to customers, which 3rd party platforms would not aided.
It’s true that at some point, 80% of their revenue was coming from Nykaa, but Sugar never gave up on their own D2C engine.
Road to victory 🤵♀️🤵🏻♀️🤵🏼♀️🤵🏽♀️🤵🏾♀️🤵🏿♀️
Big on consumer insights, Sugar filled the gap by bringing in goods that were made in India, for Indians. In her conversations with YourStory, Vineeta explained in details how sugar was made for women on the move - the travellers, the hustlers, the new Indian working clan that spent most of their days out of the house and didn’t have time to touch up.
To build for Indian skin tone & bringing global trends to India from early on created a cult following for the brand.
A pivot to brick & mortar storers 🏬
India hosts 95% of its beauty market online, and this was reason enough for Sugar to address the importance of retail stores early now. Cut to now, an average of 50% of revenue goals are achieved from their retail stories.
With the launch of their 100th brand owned store in Chennai and Sugar grew from 2,500+ retail outlets in 2020 to 35,000+ retail touch points in over 500+ cities as of today.
The social armour 🔥
From day 1, Sugar chose to work with real people than celebrities. This is also reflects in their choice of brand ambassador, Taapsee Pannu. Her entry on the brand wagon was both late and true to Sugar’s identity.
Sugar treated influencers as a research pool for all their beta launches, took their feedback and incorporated in the product. Briefly, this is what worked
✅ Big influencers : working with big names for media outburst and exclusively for public announcements of product launches
✅ Young influencers : the core of the company, especially those with lesser than 100k following. These people worked for the brand to educate, drive awareness, & top of the funnel
Personal Branding 🦈
Jumping on the boat of personal branding is took Sugar to the next stop. Vineeta on Shark Tank, Kaushik on D2C summit and the more people saw these too on the screens, the more they wanted of the brand.
What’s next?
Sugar is going big on retail & content. They’re planning new stores, over 60,000 outlets across the country, some even outside of India and venturing further down the funnel in identifying young influencers who can widen their TOF.
They’re also rumoured to head for an IPO by 2025.
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I am going to keep giving a book every week going forward. All you have to do is share this issue on Twitter (takes 5 seconds) I will announce the winners in every Friday issue. See ya.